Annaly Capital Management (NLY) drew fresh attention on July 21, 2026, after reporting second quarter net income of US$822.67 million and basic earnings per share of US$1.06 from continuing operations.

The earnings release appears to have supported Annaly Capital Management's recent momentum, with a 1-day share price return of 2.79% and a 90-day share price return of 2.93%. The 1-year total shareholder return stands at 27.07%, and the 3-year total shareholder return at 73.49%.

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The recent jump in earnings and the share price has already rewarded Annaly Capital Management investors. The next step is to weigh how much of that strength is now priced in, and how much potential is still on the table.

Most Popular Narrative: 3.3% Undervalued

Annaly Capital Management closed at $23.20, while the most followed narrative places fair value at $24.00. That gap is small, yet it rests on detailed earnings and margin assumptions.

The analysts have a consensus price target of $24.0 for Annaly Capital Management based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $2.7 billion, earnings will come to $2.3 billion, and it would be trading on a PE ratio of 11.9x, assuming you use a discount rate of 9.0%.

Want to understand why this fair value sits above today’s price? The narrative leans on rising profitability, specific revenue paths and a richer future earnings multiple. Curious which exact building blocks carry the most weight in that $24.00 figure?

Result: Fair Value of $24.00 (UNDERVALUED)

However, you still need to consider that wider mortgage spreads and prolonged rate volatility could pressure the portfolio returns and net margins of Annaly Capital Management.

Next Steps

With both risks and rewards in play for Annaly Capital Management, it makes sense to move quickly and check the underlying data for yourself. To see which issues investors are worried about and which potential upsides they are watching, review the 2 key rewards and 4 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.